Iowa offers a variety of avenues for financial assistance options to assist with relocations and expansions to locations within Iowa. Assistance is provided in the form of loans and/or forgivable loans, based in part on job creation, capital investment, the ability to meet certain wage standards, quality of employment, and economic benefits for the state and local community. The High Quality Jobs Program (HQJ) is the state’s premier financial assistance program designed to support innovation and job growth. Applications for this program are filed by cities, counties or community colleges on behalf of eligible businesses.
Angel Investor tax credits are offered to increase the availability and accessibility of venture capital, particularly for ventures at the seed capital investment stage. Two programs – the Qualifying Business tax credit and the Community-Based Seed Capital Fund tax credits – work together to encourage the creation of wealth through high-paid, new jobs while promoting industrial development and innovation. The total amount of tax credits available per fiscal year is $2 million.
The Investments in Community-Based Seed Capital Funds tax credits, along with the Qualifying Businesses Tax Credits, were created to enhance the quality of life for citizens of Iowa by increasing the availability and accessibility of venture capital, particularly for ventures at the seed capital investment stage, thereby encouraging the creation of wealth through high-paid, new jobs while promoting industrial development and innovation.
The Qualifying Business tax credit program is designed to encourage venture capital investment at the seed capital stage. The total amount of tax credits available to be issued for investments in Qualifying Businesses and Community-Based Seed Capital Funds (Angel Investor Tax Credits) is $2 million per fiscal year.
The Innovation Fund Tax Credit program was created to stimulate venture capital investment in innovative Iowa businesses. Individual investors can receive tax credits equal to 25 percent of an equity investment in a certified Innovation Fund. In turn, those certified Innovation Funds make investments in promising early-stage companies that have a principal place of business in the state of Iowa.
The Iowa New Jobs Tax Credit is an Iowa corporate income tax credit and is available to a company that has entered into a New Jobs Training Agreement (260E) and expands their Iowa employment base by ten percent or more.
Iowa sets itself apart, being one of only a few states to offer a refundable research activities credit. Iowa companies earn refundable tax credits for research and development investments that may be paid directly in cash to the company once its tax liabilities have been met. A company must meet the qualifications of the Federal Research Activities Credit in order to be eligible for the credit in Iowa.
The Targeted Jobs Withholding Tax Credit Pilot Program is a pilot program enacted in 2006 which allows the diversion of withholding funds paid by an employer to be matched by a designated “pilot” city to create economic incentives that can be directed toward the growth and expansion of targeted businesses located within a pilot city.
An employee stock ownership plan (ESOP) is both a tool for allowing the owners of companies to share the business equity with employees and a retirement plan for those employees.
The High Quality Jobs program provides qualifying businesses tax credits and direct financial assistance to off-set some of the costs incurred to locate, expand or modernize an Iowa facility. To qualify for this very flexible assistance package that includes loans, forgivable loans, tax credits, exemptions and/ or refunds, eligible businesses must meet certain wage threshold requirements.
The Demonstration Fund provides financial and technical assistance to encourage high technology prototype and concept development activities that have a clear potential to lead to commercially viable products or services within a reasonable period of time. The Demonstration Fund supports commercialization activities by small and medium-sized Iowa companies in the advanced manufacturing, biosciences, and information technology industries.
The Proof of Commercial Relevance program is designed to define and articulate the business opportunity for businesses that have demonstrated a proof-of-concept for innovative technology.
The Iowa Innovation Acceleration Fund promotes the formation and growth of businesses that engage in the transfer of technology into competitive, profitable companies that create high paying jobs. The funds are designed to support commercializing research, launching new start-ups and accelerating private investment and industrial expansion efforts that result in significant capital investment.
The Targeted Small Business (TSB) Program of Iowa is designed to help women, minorities and the disabled overcome some of the major hurdles to starting or growing a small business in Iowa. The TSB program makes microloans available to qualified Iowa small business owners.
For more information on Iowa Financial Assistance visit: Iowa Economic Development Authority